According to the new rules, UAE Cabinet has proposed a reduction in penalties for the taxpayer to make business easier in the region. However, the penalties for non-compliance are still harsh and may eat up a large chunk of a company’s business income, therefore, they must be avoided at all costs. In an event of non-compliance and failing to make a voluntary disclosure to tax authorities, the company with be notified for an audit and will also be penalized by up to 50% of the error amount. This, coupled with a 4% monthly fine paid to FTA means that a lot of money will have to be paid in case of non-payment or erroneous disclosures. Some of these penalties have been highlighted in the table below:
|Not keeping tax records||First time AED 10,000
Second time and onwards AED 50,000
|Not submitting records in Arabic in time||AED 20,000|
|Not submitting application of registration on time||AED 20,000|
|Not submitting application of deregistration on time||AED 10,000|
|Not informing FTA of an amendment in tax records which has to be submitted.||First time AED 5,000
Second time and onwards AED 15,000
|Not disclosing about a legal representative to FTA||AED 20,000 penalization for legal representative.|
|If the legal representative fails to file tax returns.||First time AED 1,000 penalization for legal representative.
Second time and onwards AED 2,000 penalization for legal representative.
|If the registrant fails to file tax returns.||First time AED 1,000
Second time and onwards AED 2,000
|Not paying tax as stated in the tax assessment form or tax return in time||Percentage-based surcharge|
|Tax returns submitted are not correct||A mix of fixed and percentage-based surcharge.|
|Voluntary disclosure of mistakes||A mix of fixed and percentage-based surcharge.|
|No disclosure of mistakes||A mix of fixed and percentage-based surcharge.|
Value-Added Taxation is a tax levied on the usage or consumption of a good / service at each stage of production or provision. Provided the nature of this tax, its identification, disclosure and payment can be quite troublesome for businesses. It automatically means that this area is fragile and even a little bit of mishandling can result in non-compliance and heavy penalties. Since ACCBOOKS has been in the market for long and has a number of VAT experts on-board, it is indeed pivotal for businesses to seek our guidance and assistance in respect of all VAT-related issues.
By purchasing our services, companies can save more than AED 50,000 and can also be confident of 100% compliance. The ACCBOOKS team that has been assigned the task of handling VAT, comprises of personnel who are well aware of the FTA regulations and VAT treatment. They also possess knowledge of the variance that prevails from industry to industry. By gaining the valuable support of our consultants and Certified Tax Agent, your organization can successfully avoid any extra levies and can undoubtedly ensure a healthy bottom line as well.